PROPOSED

PREVENTION OF SIGNIF ICANT DETERIORATION

PERMIT ISSUED PURSUANT TO THE

REQUIREMENTS AT 40 CFR § 52.21

U.S. ENVIRONMENTAL PROTEC TION AGENCY, REGION 9

PSD PERMIT NUMBER: NU 05-01

PERMITTEE: Resolute Natural Resources Company 1675 Broadway, Suite 1950 Denver, Colorado 80202

FACILITY NAME McElmo Creek Unit Oil Production Facility

FACILITY LOCATION: Section 31, Township 40 South, Range

25 East within the Four Corners Area on the Navajo Nation Indian

Reservation near the city of Aneth, San Juan County, Utah

Pursuant to the provisions of the Clean Air Ac t (CAA), Subchapter I, Part C (42 U.S.C. § 7470,

et. seq. ), and the Code of Federal Regulations (C FR) Title 40, Section 52.21, the United States Environmental Protection Agency Region 9 (EPA ) is issuing this amended Prevention of Significant Deterioration (PSD) air quality permit to Resolute Natural Resources Company (Resolute) for the McElmo Creek Unit Oil Producti on Facility as described herein, in accordance with the permit application (and plans submitted w ith the permit application), federal regulations governing the Prevention of Signi ficant Deterioration of air qu ality (40 CFR § 52.21), and other

terms and conditions set forth in this amended PSD Permit.

Failure to comply with any condition or term se t forth in this amended PSD Permit is subject to enforcement action pursuant to Section 113 of th e Clean Air Act. This permit does not relieve Resolute from the responsibility to comply w ith any other applicable provisions of the CAA (including applicable implementing regulations in 40 CFR Parts 51, 52, 60, 61 and 63), or other federal, tribal, and local requirements.

Per 40 CFR Section 124.15(b), this PSD Permit beco mes effective 30 days after the service of notice of this final permit decision unless review is requested on the permit pursuant to 40 CFR

Section 124.19.

Deborah Jordan Director, Air Division DateMcElmo Creek Unit Oil Production Facility Proposed Amended PSD Permit No. NU 05-01

October 2014 2 ABBREVIATIONS & ACRONYMS

Act Clean Air Act [42 U.S.C. § 7401 et seq.] Applicant Resolute Natural Resources Company

BACT Best Availabl e Control Technology

BTU British thermal units CAA Clean Air Act [42 U.S.C. § 7401 et seq.] CEMS Continuous Emissions Monitoring System CFR Code of Federal Regulations CMS Continuous Monitoring System

CO Carbon Monoxide

CO 2 Carbon Dioxide DSCFM Dry standard cubic feet per minute EPA United States Environmental Protection Agency

H 2 S Hydrogen Sulfide HHV Higher Heating Value

hr Hour lb, lbs Pound, pounds MCU Facility / Facility McElmo Creek Unit Oil Production Facility

min Minute

MMBTU Million British thermal units MMCFD Million cubic feet per day NAAQS National Ambient Air Quality Standards

NESHAP National Emission Standard s for Hazardous Air Pollutants NNEPA Navajo Nation Environmental Protection Agency

NO x Oxides of nitrogen

O 2 Oxygen

Permittee / Owner or Operator Resolute Natural Resources Compan y, or the owner and/or operator of the McElmo Creek Unit Oil Production Facility ppm Parts per million PSD Prevention of Significant Deterioration

PTE Potential to Emit

SCF Standard cubic feet SCFM Standard cubic feet permit minute

SO 2 Sulfur Dioxide

SO x Oxides of sulfur tpy Tons per year VOC Volatile Organic Compounds as defined in 40 CFR § 51.100(s)McElmo Creek Unit Oil Production Facility Proposed Amended PSD Permit No. NU 05-01

October 2014 3 

### MCELMO CREEK UNIT OIL PRODUCTION FACILITY

PREVENTION OF SIGNIFICAN T DETERIORATION PERMIT

PERMIT CONDITIONS

PROJECT DESCRIPTION

The McElmo Creek Unit Oil Production Facility (MCU Facility or Fa cility) is an existing oil and gas production operation located within the F our Corners Area on the Navajo Nation Indian Reservation near the city of Aneth, San Juan County, Utah. Th e Facility is owned, in partnership with the Navajo Nation Oil and Gas Company, a nd operated by the Resolute Natural Resources Company. The Facility is on the McElmo Creek Unit oilfield, which includes field operations and a gas compression plant.

The field operations consist of approximately 90 producing wells where petroleum crude oil is recovered from producing strata, and brought to the surface to be stored at either a satellite or a tank battery. There are eleven satellites that f unction as testing facilitie s for producing wells and

four tank batteries.

The gas compression plant serves tertiary oil recovery operations for the McElmo Creek Unit oilfield. The gas compression pl ant receives produced gas through a gathering system, pressures the gas up to a suitable working pressure, and re-i njects the gas to maintain reservoir pressure in the oilfield. The natural gas is injected with pr oduced water in a dual in jection system. Due to varying water injection demands in the field, and to the number of wells being serviced at any time, the gas compression plant inlet volume can vary between 10 and 18 million standard cubic feet per day (MMSCFD). The Main Flare is lo cated at the gas compression plant.

This PSD Permit amendment incorporates requirements of the federal Consent Decree that applies to the MCU Facility’s Main Flare (see United States v. Mobil Exploration and Producing U.S. Inc., Case No. 2:05–CV–319, filed June 8, 2005), which include Best Available Control Technology (BACT) emission limitations fo r emissions of sulfur dioxide (SO 2 ), nitrogen oxides (NO x ), carbon monoxide (CO), and volatile organic compounds (VOC). Air pollution emissions associated with this permit amendment will not ca use or contribute to violations of any National Ambient Air Quality Standards (NAAQS) or any a pplicable PSD increments for the pollutants regulated under the PSD permit.McElmo Creek Unit Oil Production Facility Proposed Amended PSD Permit No. NU 05-01

October 2014 4 EQUIPMENT LIST

The following devices and activities are subject to this PSD Permit.

Unit ID Description

Main Flare One (1) air-assist flare, rated at 618,104 scf/hr, which combusts produced field gas in excess of the facility compression capacity

TEG Reboiler One (1) TEG Reboiler rated at 0.75 MMBtu/hr, which combusts purchased pipeline quality natural ga s to provide heat to the Glycol

Heater

Glycol Heater One (1) Glycol Heater (TEG re generator), rated at 12 MMCFD, which provides inter-stage dehydration for the HOS-6 compressor Gasoline Storage

Tank One (1) 10,000 gallon nominal capacity gasoline storage tank that is used for refueling of vehicles

PERMIT CONDITIONS

I. PERMIT EXPIRATION

As provided in 40 CFR § 52.21(r), this PSD Perm it shall become invalid if construction:

A. is not commenced (as defined in 40 CF R § 52.21(b)(9)) within 18 months after the approval takes effect; or

B. is discontinued for a period of 18 months or more; or

C. is not completed within a reasonable time.

II. PERMIT NOTIFICATION REQUIREMENTS

The Permittee shall notify EPA Region IX by letter or by electronic mail of the:

A. date construction is commenced, postmarke d within 30 days of such date;

B. actual date of initial startup, as defi ned in 40 CFR § 60.2, postmarked within 15 days of such date;

C. date upon which initial performance tests will commence postmarked not less than 30 days prior to such date. Notification may be provided with the submittal of the performance te st protocol; and

D. date upon which initial performance eval uation of the continuous emissionsMcElmo Creek Unit Oil Production Facility Proposed Amended PSD Permit No. NU 05-01

October 2014 5 monitoring system (CEMS) will commence in accordance with 40 CFR § 60.13(c), postmarked not less than 30 days prior to such date . Notification may be provided with the submittal of the CEMS performance test.

III. FACILITY OPERATION

A. At all times, including periods of star tup, shutdown, shakedown, and malfunction, the Permittee shall, to the extent practicable, maintain and operate the Facility, including associated air po llution control equipment, in a manner consistent with good air pollution control pr actice for minimizing emissi ons. Determination of whether acceptable operating and maintenance procedures are being used will be based on information available to EPA, wh ich may include, but is not limited to, monitoring results, opacity observations, review of operating maintenance procedures, and inspecti on of the Facility.

B. The operating staff with management authority at this Facility shall be advised of

and be familiar with all the conditions of this PSD Permit.

IV. GENERAL MALFUNCTION REPORTING

A. The Permittee shall notify EPA at R9.AEO@epa.gov within two (2) working days following the discovery of any failure of air pollution control equipment or process equipment, or failure of a pro cess to operate in a normal manner, which

results in an increase in emissions above the allowable emission limits stated in Section IX of this permit.

B. In addition, the Permittee sh all provide an additional notification to EPA in writing or electronic mail within fifteen ( 15) days of any such failure described

under Condition IV.A. This notification shall include a de scription of the malfunctioning equipment or abnormal operation, the date of the initial malfunction, the period of time over which emissions were increased due to the failure, the cause of the failure, the estimated resultant emissions in excess of

those allowed in Section IX , and the methods utilized to mitigate emissions and restore normal operations.

C. Compliance with this malfunction notific ation provision shall not excuse or otherwise constitute a defense to any violation of this permit or any law or regulation such malfunction may cause.

V. RIGHT OF ENTRY

A. EPA and its contractors, cons ultants, and agents shall have authority to enter theMcElmo Creek Unit Oil Production Facility Proposed Amended PSD Permit No. NU 05-01

October 2014 6 Facility at all reasonable times, and upon presentation of credentials, shall be permitted to:

1. Enter the premises where the Facility is located or where any records are required to be kept under the terms and conditions of this PSD Permit;

2. During normal business hours, have access to and to copy any records required to be kept under the terms and conditions of this PSD Permit;

3. Inspect any equipment, operation, or method subject to requirements in this PSD Permit; and

4. Sample materials and emissions from the Facility.

B. This provision in no way limits or otherw ise affects any righ t of entry held by EPA pursuant to applicable federal, state, or local laws, regulations, or permits.

VI. TRANSFER OF OWNERSHIP

In the event of any changes in control or ow nership of the Facility, this PSD Permit shall be binding on all subsequent ow ners or operators. Within 14 days of any such change in control or ownership, the Permittee shall no tify the succeeding owner or operator of the

existence of this PSD Permit and its conditions by letter. The Pe rmittee shall send a copy of this letter to EPA Region IX within thirty (30) days of its issuance.

VII. SEVERABILITY

The provisions of this PSD Permit are severa ble, and, if any provision of the PSD Permit is held invalid, the remainder of th is PSD Permit shall not be affected.

VIII. ADHERENCE TO APPLICATION AND COMPLIANCE WITH OTHER

ENVIRONMENTAL LAWS

The Permittee shall construct in accordance with this PSD Permit, the application on which this permit is based, and all other appli cable federal, state, and local air quality regulations. This PSD Permit does not rel ease the Permittee from any liability for compliance with other applicable federal, state, and local environmental laws and regulations, including the Clean Air Act.McElmo Creek Unit Oil Production Facility Proposed Amended PSD Permit No. NU 05-01

October 2014 7 IX. SPECIAL CONDITIONS FOR THE MAIN FLARE

A. Definitions

1. “CO 2 Breakthrough” shall mean an event where a gas or fluid injected in the Facility’s oil field for the purpose of promoting the production of oil contacts a producing well and results in an increase in gas volume to compressor station equipment.

2. “Day” shall mean a calendar day, unless expressly stated to be a working day. In computing any period of time under Section IX of this PSD Permit, where the last day of su ch period would fall on a Saturday, Sunday, or federal holiday, the period shall run until the close of business on the next day that is not a Satu rday, Sunday, or federal holiday.

3. “Facility” shall mean the Permittee’ s McElmo Creek Unit Oil Production Facility and associated oil fields, lo cated near Aneth, Utah, on the Navajo

Nation Indian Reservation.

4. “Field Flares” shall mean the followi ng flares at the Facility: (i) Tank Battery Flares at MCU Area 1 Battery, MCU Area 2 Battery, MCU Area 4 Battery, and MCU Area 6 Battery; and (ii) Satellite Flares at MCU Section 2, MCU Section 3, MCU Section 5, MCU Section 6, MCU Section 9, MCU Section 11, MCU Section 17, MCU Section 19, MCU Section 32,

and MCU Section 33.

5. “Flaring Incident” shall mean conti nuous or intermittent flaring at the

Main Flare that results in the emissions of SO 2 equal to, or greater than, five-hundred (500) pounds in any twen ty-four (24) hour period; provided, however, that if five-hundred (500) pounds or more of SO 2 have been emitted in a twenty-four (24) hour pe riod and the flaring continues into subsequent, contiguous, non-overlapping tw enty-four (24) ho ur period(s), each period of which results in emissi ons equal to, or greater than, five hundred (500) pounds of SO 2 , then only one Flaring Incident shall have occurred. Subsequent, contiguous, n on-overlapping periods are measured from the initial commencement of flaring within the Flaring Incident.

6. “Main Flare” shall mean the flare instal led as part of the Facility’s former gas processing plant.

7. “Main Flare Emissions” shall mean the emissions from the Main Flare at the Facility as well as all emissions that result from: (1) combustion ofMcElmo Creek Unit Oil Production Facility Proposed Amended PSD Permit No. NU 05-01

October 2014 8 fuel gas in the Main Flare’s pilot, (2 ) the closed drain and filter backwash operations, (3) CO 2 Breakthroughs, (4) any Scheduled Maintenance, and (5) unscheduled maintenance of the Facility’s compressors.

8. “Malfunction” shall mean, for the purposes of reporting under Condition IX.I.3 of this PSD Permit only, any sudden and unavoidable breakdown of process or pollution control equipment. CO 2 Breakthroughs and Scheduled Maintenance of the Facility’s compressors are not

Malfunctions.

9. “Root Cause” shall mean the primar y cause of a Flaring Incident as determined through a process of investig ation; provided, however, that if a Flaring Incident encompasse s multiple releases of SO 2 , the “Root Cause” may encompass multiple primary causes.

10. “Scheduled Maintenance” shall mean work that is part of the routine work plan for the compressors located at the Facility's former gas processing plant. This work is typically pl anned and arranged on a set frequency, usually based on periods of time (e.g., da ily, weekly or monthly) or on the operating hours of the equipment. Scheduled Maintenance shall not include work necessitated by the fail ure of a part of a compressor.

B. Air Pollution Control Equipment

1. The Main Flare shall be an auto matic air-assisted flare system.

2. The Main Flare shall be operated with a variable speed fan.

C. Emission Limitations

1. The Permittee shall not discharge or cau se the discharge of emissions from the Main Flare into the atmosphere in excess of the following the emission limitations, based on a cumulative 365-day rolling total.

SO 2 NO
x CO VOC

60.0 tpy 13.4 tpy 73.0 tpy 95.4 tpy

2. The Permittee shall calculate the 365-day rolling emissions totals for SO 2 , NO x , CO, and VOC each day for the Main Flare.

3. The Permittee shall not use the Field Flares to circumvent the emissionMcElmo Creek Unit Oil Production Facility Proposed Amended PSD Permit No. NU 05-01

October 2014 9 limitations in Condition IX.C.1.

4. All emissions during all modes of op eration (including, but not limited to, emissions during periods of startup, shutdown, or malfunction) shall be used in determining compliance with the emission limitations in Condition

IX.C.1.

D. Main Flare Operational Requirements

1. The Permittee shall install, operate and maintain an automatic air-assisted flare system on the Main Flare, pur suant to the provisions of 40 CFR § 60.18(c)(5) and (f)(6).

2. The Permittee shall operate and maintain the Main Flare in compliance with 40 CFR § 60.18(c)(l), (c)(2), (c)(3)(ii ), (c)(5), (d), (e), (f)(1) through (f)(4), and (f)(6).

3. The Main Flare shall be operated with a flame present at all times when emissions may be vented to them.

4. The Permittee shall comply with the following requirements for ensuring proper combustion efficiency:

(a) The Main Flare shall be operated with a variable speed fan.

(b) The net heating value air a ssist dilution parameter (NHV dil ) shall be greater than or equal to 24.4 BTU/ft 2 , calculated as follows:



### ܨܦ ൌ ܳ ௩௚ 

### ൈ ܦ݅ܽ݉

ܳ ௩௚ 

### ൅ ܳ
௦ 

### ൅ ܳ ௣௥௘௠௜௫ ௔௜௥ 

### ൅ ܳ ௣௘௥௜௠௘௧௘௥	௔௜௥ (Eqn 1)



### ܰܪܸ ௗ௜௟ 

### ൌ ܰܪܸ ௩௚ 

### ൈ ܨܦ ) Eqn 2)

where:

DF = Dilution factor, feet (ft). Q vg = Volumetric flow rate of the flare vent gas, scfm. Q s = Cumulative volumetric flow of total steam, scfm.McElmo Creek Unit Oil Production Facility Proposed Amended PSD Permit No. NU 05-01

October 2014 10 Q premix air = Cumulative volumetric flow of premix assist air, scfm Q perimeter air = Cumulative volumetric flow of perimeter assist air, scfm.

Diam = Diameter of the flar e vent gas release stack, ft.

NHV vg = Net heating value of flare vent gas, BTU/scf.

NHV dil = Net heating value air a ssist dilution parameter.

5. The Permittee shall also perform any necessary operations to minimize

emissions so that emissions are at or below the emission limits specified in

this Permit.

E. Monitoring, Testing, and Em issions Calculations

1. The Permittee shall use the following requirements to determine compliance with the emission limitati ons in Condition IX .C.1 for the Main

Flare.

(a) The Permittee shall measure and record the H 2 S concentration in the field gas at the Facility in each ca lendar month at the inlet to the Facility’s former gas processing plan t where the Main Flare is located.

(b) The Permittee shall continuously meas ure and record the volume of gas combusted in the Main Flare.

(c) The Permittee shall install, ope rate and maintain continuous monitoring systems on the Main Flar e for the usage of pilot gas and purge gas (other than nitrogen or othe r inert gas) by the Main Flare, in standard cubic feet per minute (SCF M). Readings shall be taken at least once every 5 minutes and the average hourly values shall be recorded on an hourly and daily basis.

(d) Each and every calendar day, the Permittee shall calculate and record the daily emissions from the Main Flare based on the last recorded

measurement of H 2 S concentration in the fiel d gas at the Facility and that day’s recorded volume of gas combusted in the Main Flare.

(e) Each and every calendar day, the Pe rmittee shall calculate the 365-day rolling total of emissions of SO 2 , NO x , CO, and VOC for the Main Flare. Each 365-day rolling total sha ll be calculated using data from the previous 365 days. The Permitt ee shall maintain all records of actual operating data an d calculations.

(f) If the Permittee is unable to measure the volume of gas combusted inMcElmo Creek Unit Oil Production Facility Proposed Amended PSD Permit No. NU 05-01

October 2014 11 the Main Flare on any day, the volume of gas for that day shall be deemed to be equal to the daily average volume of gas combusted in the Main Flare based on the previ ous 12 months’ emissions data. However, the use of this daily av erage as substitute data neither

relieves nor excuses the Permittee from complying with the sampling, data collection, and monitoring requirements.

2. The Permittee shall use the following requirements to determine compliance with the operating limitations in Condition IX.D.4 for the

Main Flare. The Permittee shall calcul ate and record the net heating value air assist dilution parameter of the fi eld gas being combusted in the Main

Flare as follows.

(a) The Permittee shall continuously measure and record the following in

the Main Flare: (1) The volume of field gas combusted; (2) The volume of perimeter assist air used; and (3) If pre-mix assist air is used, the volume of premix assist air

used.

(b) The flow rate monitoring systems must be corrected for the temperature and pressure in standard conditions (i.e., a temperature of 20 °C [68°F] and a pressure of 1 atm).

(c) The Permittee shall automatically supply supplemental fuel to the Main Flare if the field gas does not have sufficient heating value.

(d) Continuous pressure/temperatu re monitoring system(s) and appropriate engineering calculations may be used in lieu of a

continuous volumetric flow m onitoring systems provided the molecular weight of the gas is known. For assist air, use a molecular weight of 29 pounds per pound-mole. For flare vent gas, molecular weight must be determined using compositional analysis.

(e) The Permittee shall install a monitoring system capable of calculating and recording the net heating value ai r assist dilution parameter of the field gas being combusted in the Ma in Flare in sixty-minute averages, rolled every five minutes.

(f) The Permittee shall determine the net heating value of flare vent gas (NHV vg ) using 40 CFR 60.18(f)(3).McElmo Creek Unit Oil Production Facility Proposed Amended PSD Permit No. NU 05-01

October 2014 12 3. The Permittee shall continuously monito r the Main Flare for the presence of a flare pilot flame using a thermoc ouple or any other eq uivalent device to detect the presence of a flame, which monitoring shall be conducted in accordance with 40 CFR 60.18(f)(2). Th e heat sensing monitoring device shall be operated at all times. The Main Flare shall be equipped with an alarm that informs Facility operators of any period when a pilot flame is not present in the flare and no gas sha ll be sent to the flare until a pilot

flame is restored.

4. The Permittee shall operate the Main Flare with no visible emissions, except for periods not to exceed a total of 5 minutes during any 2

consecutive hours. EPA Test Method 22 in Appendix A of 40 CFR Part

60 shall be used to determine the co mpliance of flares with the visible emission provisions. The observation pe riod is 2 hours and shall be used according to Method 22. The Permittee shall perform monthly visible emissions tests during a flar ing event using Method 22.

F. Operation and Maintenance of Main Flare and Compressors

1. The Permittee shall at all times and to the extent practicable, including during periods of startup, shutdown, Malfunction, CO 2 Breakthrough, Scheduled Maintenance, or unschedul ed maintenance of the Facility’s compressors, operate and maintain th e compressor station equipment and

Main Flare in a manner consistent w ith good air pollution control practices for minimizing emissions.

2. The Permittee shall comply with the provisions of the Operations and Maintenance Plan in Appendix A of this PSD Permit. The Permittee’s failure to comply with any requirement of the Operations and Maintenance

Plan shall constitute a violation.

3. The Permittee shall follow the proc edures for the inspection of the Facility’s compressors and associated equipment as set forth in the Life Cycle Maintenance Plan in the Operations and Maintenance Plan in Appendix A of this PSD Permit, and sh all maintain inspection logs at the Facility documenting that these insp ections have been conducted.

4. The Permittee shall maintain daily r ecords at the Facility regarding operation of the Facility’s compressors on a Daily Plant Reading Form in the Operations and Maintenance Plan in Appendix A of this PSD Permit.

5. The Permittee shall maintain a supply of designated spare parts for theMcElmo Creek Unit Oil Production Facility Proposed Amended PSD Permit No. NU 05-01

October 2014 13 Facility’s compressors and associated equipment that includes all of the equipment on the Spare Parts List in the Operations and Maintenance Plan in Appendix A of this PSD Permit.

6. After using equipment on its Spare Pa rts List, the Permittee shall replace such equipment as expeditiously as possible. The Permittee shall place a purchase order for such equipment with in 45 days after it is used.

7. The Permittee shall conduct training of Facility operators in accordance with the Training Program for Plant Operators in Section IV of the Operations and Maintenance Plan in Appendix A of this PSD Permit. The Permittee shall maintain records documenting that the training has been

conducted.

8. The Permittee shall retain copies of inspection logs and other records required by Section IX.F (Operations and Maintenance of Main Flare and Compressors) of this PSD Permit.

9. The Permittee shall maintain inspection, maintenance and repair log(s) or other similar records and identify any occasion when the Permittee was unable to carry out its establishe d maintenance procedures, with explanation.

G. Root Cause Analysis

1. No later than 72 hours after an event first qualifies as a Flaring Incident, the Permittee shall notify by telephone, at (415) 947-8700, the Manager of the Air/TRI Enforcement Office, En forcement Division of EPA Region IX, of such Flaring Incident. Tele phone notification shall be followed by a detailed written notification to EPA, at the address in Condition X.C of this PSD Permit, made within seven (7) working days after the event first qualifies as a Flaring Incident.

2. For a Flaring Incident caused by Scheduled Maintenance or a CO 2 Breakthrough, the Permittee shall submit a report to EPA, at the address in Condition X.C of this PSD Permit, no la ter than sixty (60) days following the end of such a Flaring Incident that sets forth the following information listed below. Except for those Flar ing Incidents caused by Scheduled

Maintenance or a CO 2 Breakthrough, the Permittee shall conduct a Root Cause Analysis in accordance with the Root Cause Failure Analysis Program in Appendix B of this PSD Permit to evaluate the cause of each Flaring Incident and shall submit a report to EPA, at the address inMcElmo Creek Unit Oil Production Facility Proposed Amended PSD Permit No. NU 05-01

October 2014 14 Condition X.C of this PSD Permit, no la ter than sixty (60) days following the end of a Flaring Incident, that sets forth all of the following:

(a) The date and time that the Flaring In cident started and ended. To the extent that the Flaring Incident invo lved multiple releases either within a twenty-four (24) hour period or within subsequent, contiguous, nonoverlapping twenty-four (24) hour pe riods, the Permittee shall set forth the starting and ending dates and times of each release;

(b) An estimate of the quantity of SO 2 that was emitted and the calculations that were used to determine that quantity;

(c) The steps, if any, that the Permitt ee took to limit the duration and/or quantity of SO 2 emissions associated with the Flaring Incident;

(d) Except for those Flaring Incidents caused by Scheduled Maintenance

or a CO 2 Breakthrough, a detailed analysis that sets forth the Root Cause and all contributing causes of th at Flaring Incident, to the extent determinable; however, if a Flaring Incident is caused by Scheduled

Maintenance or CO 2 Breakthrough, then the Permittee need only identify the Root Cause as Scheduled Maintenance or CO 2 Breakthrough (whichever is applicab le), and either (i) describe the nature of the work done for Scheduled Maintenance or (ii) identify the specific wells that most likely experienced the CO 2 Breakthrough;

(e) An analysis of the measures, in cluding possible design, operational, and maintenance changes, that are available to reduc e the likelihood of a recurrence of a Flaring Incident resulting from the same Root Cause or contributing causes in the future . If the Permittee concludes that corrective action(s) is (are) requi red under Section IX .H (Corrective Action) of this PSD Permit, the report shall include a description of the action(s) and, if not already comp leted, a schedule for its (their) implementation, including proposed commencement and completion

dates. If the Permittee concludes th at corrective action is not required under Section IX.H (Corr ective Action) of this PSD Permit, the report shall explain the basis for that conclusion;

(f) To the extent that investigati ons of the causes and/or possible corrective actions still are under way on the due date of the report, a statement of the anticipated date by which a follow-up report fully conforming to the requirements of Conditions IX.G.2.d and IX.G.2.e of this PSD Permit will be submitted. Nothing in this PermitMcElmo Creek Unit Oil Production Facility Proposed Amended PSD Permit No. NU 05-01

October 2014 15 Condition shall be deemed to excuse the Permittee from its investigation, notificatio n, reporting, and correc tive action obligations in this PSD Permit for any Flaring Incident that occurs after the Flaring Incident for which the Permittee has requested an extension of

time under this Permit Condition

.

(g) To the extent that completion of the implementation of corrective action(s), if any, is not finalized at the time of the submission of the report required under this Permit Condition, then, by no later than thirty (30) days after completion of the implementation of corrective action(s), the Permittee shall submit a report identifying the corrective action(s) taken and the dates of commencement and completion of implementation.

H. Corrective Action

1. In response to any Flaring Incident, the Permittee shall take, as expeditiously as practicable, such interim and/or long-term corrective actions, if any, as are consistent with good engineering practice to

minimize the likelihood of a recurr ence of the Root Cause and all contributing causes of th at Flaring Incident.

I. Compliance Reporting

1. Within thirty (30) days following the end of each calendar semiannual period (i.e., January 1 to June 30, and July 1 to December 31), the Permittee shall submit to EPA a semiannual report.

2. All semiannual reports shall be si gned and affirmed by a responsible official, and bearing the certi fication statement as follows:

“I certify under penalty of law that I have examined and am familiar with

the information submitted in this document and all attachments and that this document and its attachments were prepared either by me personally or under my direction or supervision in a manner designed to ensure that qualified and knowledgeable personnel properly ga thered and presented

the information contained therein. I further certify, based on my personal knowledge or on my inquiry of those individuals immediately responsible for obtaining the information, that th e information is true, accurate, and complete. I am aware that there are significant penalties for submitting false information, including the possib ility of fines and imprisonment for knowing and willful submission of a materially false statement.”McElmo Creek Unit Oil Production Facility Proposed Amended PSD Permit No. NU 05-01

October 2014 16 3. All semiannual reports shall incl ude the following information:

(a) A list of the rolling 365-day cumulativ e Main Flare emissions for each day in that semiannual period;

(b) A list of each day in the semiannua l period when the emissions limits that apply to the Main Flare were exceeded and, for each such day, the limit(s) exceeded and the amount(s) of excess emissions;

(c) A list of all emissions for the semiannual period that the Permittee claims are attributable to Malfunctions;

(d) A list of all emissions for the semiannual period that may be

attributable to CO 2 Breakthroughs, Scheduled Maintenance, or unscheduled maintenance of the Facility’s compressors;

(e) The date(s) and time(s) during the semiannual period when the thermocouple or flow meter associ ated with the Main Flare was inoperative;

(f) The date(s) and time(s) during the semiannual period when the

Permittee failed to measure or record the H 2 S concentration in the field gas at the Facility or failed to continuously measure or record the volume of gas combusted in the Main Flare;

(g) A certification that during the semiannual period the Permittee operated and maintained the compressor station equipment and Main

Flare in a manner consistent with good air pollution control practices for minimizing emissions, and perf ormed all of the obligations (including, but not limited to, in spection and training obligations) contained in the Operations and Maintenance Plan in Appendix A of this PSD Permit;

(h) A certification that the Field Flares have not been used to circumvent the emission limits that apply to the Main Flare;

(i) A list of total emissions from the Field Flares and the reason for Flaring; and

(j) Any and all reports generated from the root cause analysis and correctiveMcElmo Creek Unit Oil Production Facility Proposed Amended PSD Permit No. NU 05-01

October 2014 17 action program of Conditions IX.G and IX.H of this PSD Permit.

J. Recordkeeping Requirements

1. The Permittee shall maintain a file of all records, data, measurements, reports, and documents related to opera tion of the Facility. All records shall be in a permanent form suitable for inspection.

2. The Permittee shall retain the following records at the facility for a period of at least five (5) years from the date of monitoring, sampling, measurement, or reporting. All appli cable records shall be maintained at the nearest manned facility and shall be readily accessible.

(a) Each 365-day rolling total for SO 2 , NO x , CO, and VOC emissions;

(b) Emissions calculations of SO 2 , NO x , CO, and VOC for the Main Flare,

which shall include the emission f actors, operating data and other supporting documentation that th e Permittee used to calculate emissions of each pollutant;

(c) Monthly H 2 S concentration in the field gas at the Facility;

(d) Daily total volume of gas combusted in the Main Flare;

(e) Gas throughput;

(f) Records of gas anal yses and testing;

(g) Records of flare design for the Main Flare in accordance with 40 CFR 60.18 (including whether the flare is steam-assisted, air-assisted, or non- assisted);

(h) Semiannual reports required in Se ction IX.I (Compliance Reporting), of this PSD Permit;

(i) A written log of the monthly inspections of the Main Flare containing the following information for each in spection: (i) the date and time of the inspection, and the name of the observer; (ii) a description of any corrective actions taken and repairs made; and (iii) the date(s) of corrective actions and repairs;

(j) Visible emission readings, heat co ntent determinations, flowrateMcElmo Creek Unit Oil Production Facility Proposed Amended PSD Permit No. NU 05-01

October 2014 18 measurements, and exit velocity determinations made;

(k) Periods when the pilot flame is absent or spark igniter(s ) is inoperable;

(l) Any and all reports generated from the root cause analysis and corrective action program, which shall include the following:

(1) Date, time and duration of flaring;

(2) Description of the event, including the flare(s) involved in the event and a discussion of the cause(s) and probable cause(s) of the event;

(3) Confirmation that the flare(s) f unctioned properly, i.e., a flame was present and any visible emi ssions that occurred were in compliance with 40 CFR 60.18(f)(1);

(4) Corrective actions taken during the event; and

(5) A description of any actions ta ken to prevent or reduce the

likelihood of similar future occurrences.

(m) Inspection, maintenance and repair log( s) or other similar records; and

(n) Any other records and reports required by this PSD permit.

X. AGENCY NOTIFICATION

A. Permit Applications & Permit-Related Requests.

The owner or operator shall submit perm it applications, permit amendments, and other applicable permit information, which includes but not limited to installation of control equipment, replacement of an emissions unit, and changes that contravene permit terms, to:

Director, Air Divi sion (Attn: AIR-3) U. S. Environmental Protection Agency Region 9

75 Hawthorne Street San Francisco, CA 94105McElmo Creek Unit Oil Production Facility Proposed Amended PSD Permit No. NU 05-01

October 2014 19 B. Submittals to Navajo Nation Environmental Protection Agency.

The owner or operator shall submit copies of all corresponden ce required by this

PSD Permit to:

Navajo Nation Environmental Protection Agency Air Quality Control Program a nd Operating Permits Program

P.O. Box 529 Fort Defiance, AZ 86504

C. Compliance Reporting.

Unless otherwise directed by the EPA or th is PSD Permit, the owner or operator shall submit a copy of all test plans, repor ts, certifications, not ifications, and other information pertaining to compliance w ith this PSD Permit to the following

address. All notices and submissions sha ll be sent by certified mail, express mail, or similar overnight mail delivery with re turn receipt requested and addressed to:

Director, Enforcement Di vision (Attn: ENF-2-1) U.S. Environmental Protection Agency, Region IX

75 Hawthorne Street San Francisco, California 94105

All notices and submission made in accordance to Condition X.C.1 shall be deemed submitted on the date postmarked. All notices and submissions made in accordance to Condition X.C.1 shall be signed and affirmed by a responsible official, and bearing the certi fication statement as follows:

“I certify under penalty of law that I have examined and am familiar with the

information submitted in this document and all attachments and that this document and its attachments were prepar ed either by me personally or under my direction or supervision in a manner de signed to ensure that qualified and knowledgeable personnel properly gather ed and presented the information

contained therein. I furt her certify, based on my pe rsonal knowledge or on my inquiry of those individuals immedi ately responsible for obtaining the information, that the information is true, accurate, and complete. I am aware that there are significant penalties for su bmitting false information, including the possibility of fines and imprisonment for knowing and willful submission of a materially false statement.”